VX Fiber responds to the Chancellor of the Exchequer’s Budget Statement

11th March 2020

Mikael Sandberg, Chairman, VX Fiber

In response to the Chancellor’s first Budget statement, Mikael Sandberg, Chairman at VX Fiber said:

Last year, Boris Johnson stated that he wanted a turbo-charged broadband revolution, giving all UK businesses and homes access to full-fibre by 2025. In the Tory manifesto, he went on to describe how he wanted to ‘Unleash Britain’s Potential’ by ensuring that the country continues to tap into the fruitful ‘Digital Economy’- becoming a nation of start-ups and successful scale-ups.

In response to this there was a strong suggestion at the Tory Party Conference last year from former Chancellor Sajid Javid that money (£5 billion) would be made available for connectivity upgrades, focusing on fast broadband access in harder-to-reach parts of the UK. Following from this, Ofcom’s four-point plan focusing on tackling the remaining roadblocks to investment and supporting competition within the industry; and then this week the Shared Rural Network announcement.

£5 billion to roll out gigabit capable broadband comes as no real surprise. But this investment will be ‘lukewarmly’ received by the industry. To plan for tomorrow’s prosperity and back companies to innovate and grow, there’s no question that access to ubiquitous connectivity from Land’s End to John O’Groats is needed. But if the investment continues on its current trajectory, the original 2033 target of ubiquitous full-fibre coverage in the UK is unlikely to be achieved, and 2025 is a pipe dream.

Let’s be totally clear – our fibre penetration currently sits at a mere 10% of the UK. For every premise – including homes, businesses and public buildings –to have fibre served directly to it, not to mention the necessary fibre infrastructure to support 5G networks and beyond, the UK needs to replace all the current copper infrastructure. So, without sounding ungrateful, £5 billion is just not enough. It won’t even touch the sides!

To have the necessary impact the government must continue to play its vital role as a catalyst for full-fibre deployment. Funding schemes, as well as addressing policies/regulations that acted as a bottleneck in deployment (e.g. Barrier Busting Taskforce), have been positive steps taken by the UK government to support the industry. But one of the major challenges that it will continue to face in rolling out fibre is financing. For the UK to achieve any full-fibre coverage target, there needs to be more collaboration and investment from both the public and private sector. Support is needed from other sectors of society and perhaps those who potentially will gain profusely from the economic benefits connectivity brings.

It looks very much like the coronavirus will be a test case for the need for full-fibre coverage in the UK. Even if we don’t see a total lockdown in the UK (as with Italy), what we are experiencing is companies of all sizes requiring their employees to work from home. And added to this schools, colleges and universities closing their doors and turning to online tutorials. Not to mention some global conferences who are also looking at the option of webinars, etc, and those at home taking the opportunity to ‘catch-up’ on the latest box set on Netflix, Amazon Prime or Apple TV – all requiring internet connectivity. With 90% of UK premises not having access to full-fibre, it’s going to be a struggle!

VX Fiber is a Swedish Technology company – a digital infrastructure specialist with more than 20 years’ experience building and operating full fibre FTTP open access networks globally, connecting new subscribers at a rate of 200 per day / 3,000 – 5,000 per month.

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